Zee Entertainment approves Rs 3,143 crore promoter-led fundraise via preferential warrants

The board of Zee Entertainment Enterprises Ltd (ZEEL) on Wednesday approved a preferential issue of fully convertible warrants worth up to ₹3,143.5 crore to promoter group entity Sunbright Mauritius Investments Ltd, marking a significant capital infusion into the media company while also clearing the launch of a new employee stock option plan (ESOP 2026).

The fundraising proposal, which remains subject to shareholder and regulatory approvals, involves the issuance of up to 24.95 crore fully convertible warrants at an issue price of ₹126 apiece. Each warrant will be convertible into one fully paid-up equity share of face value Re 1 within a maximum period of 18 months from the date of allotment.

According to the company, the total issue size will amount to approximately ₹3,143.52 crore. The warrants will be allotted on a preferential basis to Sunbright Mauritius Investments Ltd, a promoter group entity, in accordance with the provisions of the Companies Act, 2013 and Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

Under the terms of the issue, the proposed allottee will pay 25% of the warrant issue price, or ₹31.50 per warrant, at the time of subscription. The remaining 75%, amounting to ₹94.50 per warrant, will be payable at the time of exercising the conversion option. The warrants may be converted into equity shares in one or more tranches within 18 months from the date of allotment. If the warrants remain unexercised after the stipulated period, they will lapse and the subscription amount already paid will stand forfeited.

The company said the proposed preferential issue would result in Sunbright Mauritius Investments Ltd holding up to 24.95 crore warrants, representing as much as 20% of ZEEL's fully diluted share capital upon conversion. Prior to the proposed allotment, the investor held no shares in the company.

ZEEL said the issue price of ₹126 per warrant includes a premium of ₹125 over the face value of Re 1 per share. The price represents an 11.86% premium to the price determined under the SEBI ICDR Regulations and a 16.33% premium over the closing market price of the company's shares on the National Stock Exchange as on July 1, 2026. The company added that the pricing was determined after considering both a pricing report and a valuation report prepared by a registered valuer in accordance with applicable SEBI regulations.

Besides approving the capital raise, the board also cleared the introduction of ESOP 2026, subject to shareholder approval. The employee stock option scheme will be implemented in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and other applicable laws.

Under the proposed plan, ZEEL may grant up to 3.74 crore stock options, with each option convertible into one equity share of face value Re 1. The exercise price for each option has been fixed at ₹126 per share. The company said detailed terms relating to vesting schedules, exercise timelines and other significant conditions will be disclosed while seeking shareholder approval.

The company also approved convening a shareholders' meeting to seek approval for both the preferential issue of warrants and the ESOP 2026 scheme.

ZEEL said the preferential allotment and the ESOP proposal are subject to approvals from shareholders as well as relevant regulatory, statutory and government authorities, wherever applicable.